Childcare rules eased in back-to-work drive

Chancellor offers £500 in bid to address crisis in industry as more facilities struggle with rising costs

A bonus of £500 will be offered to people who become childcare workers in a scheme to be announced in the Budget on Wednesday. The incentive is designed to convince people to join the industry after problems finding employees fuelled a decline in the number of available childcare places. Other changes in Jeremy Hunt’s back-to-work drive include increasing from four to five the number of two-year-olds a childcare worker in England can look after.

NEW £500 bonuses will be offered to people who become childcare workers in a pilot scheme to be announced in the Budget on Wednesday.

The financial incentive is designed to convince Britons to join the industry after problems finding employees fuelled a decline in the number of available childcare places.

It is one of a string of moves in childcare that Jeremy Hunt will unveil this week as he includes support for parents in his new back-to-work drive.

Another change will see the cap for how many two-year-olds a childcare worker in England can look after rise from four to five in an attempt to drive down costs.

There has been a stark fall in the number of facilities offering childcare in recent years, with a drop of 10,600 providers since August 2019 in England.

Mr Hunt, the Chancellor, is set to herald the policies, alongside changes to when childcare support is paid to those on Universal Credit, as an important move to help parents work.

The UK is the only major developed country to have suffered a sustained rise in economic inactivity since the start of the pandemic and there are 1.7 million jobless Britons who say they want to work.

It is hoped that a boost for the childcare sector will cut costs for parents who will then find it easier to return to the workforce.

But the changes are much smaller in scale than the “big bang” reforms Liz Truss was preparing as prime minister, which included a major expansion of free childcare.

Both policy changes will only apply in England, given early years policy is devolved to the Scottish, Welsh and Northern Irish parliamentary bodies.

The ratio change will mean a childcare worker can look after five twoyear-olds rather than four and brings the English rules into line with those in Scotland.

Critics have questioned whether loosening ratios could impact safety standards and if they will really reduce costs as some reformers want.

The £500 bonus scheme will be a pilot. It is unclear when it will come into force, how long it will last and whether the scheme will apply in all regions of England.

Neil Leitch, chief executive of the Early Years Alliance, the largest membership organisation representing early years providers in England, was critical of the moves.

Mr Leitch said: “If the Government moves on ratios it will fly in the face of what both parents and educators want, and it will do nothing to reduce the cost of early years.”

He also questioned whether the £500 bonus would really incentivise the childcare sector enough to convince new workers to join, saying he feared the move was a “gimmick”.

Mr Hunt told the BBC yesterday that childcare support was “expensive” as he explained why much of the new support was focused towards those on universal credit.

This week Mr Hunt will also unveil a slashing of customs red tape to help UK businesses trade overseas, using freedoms that come from Britain being outside of the EU customs union.

Mr Hunt said: “A simpler tax and customs system lets businesses focus on what they do best – creating wealth and generating economic growth – instead of getting tied up in red tape.

“Post-brexit freedoms offer an outstanding opportunity for us to do this.”

Bridget Phillipson, Labour’s shadow education secretary, used a speech last week to argue that improving childcare was one of the party’s priorities.

Ms Phillipson said: “Labour will not invest in a broken system of childcare provision that doesn’t deliver for families, for children or our economy.

“The Tories’ failure on growth means we do not know what the fiscal inheritance of the next Labour government will be. But we will not be straitjacketed by the jerry-built system left to us — our focus will be on reform.”